Ethereum Owned by a Convicted Silk Road Drug Dealer Ruled to be Proceeds of Crime

A ruling by the high court of Ireland pronounced Ethereum stored in an online wallet by a convicted online drug dealer as proceeds of crime. The judgment was made following a revisit by the Criminal Assets Bureau (CAB) on an already closed case. CAB had initially failed to go after the Ethereum as its use hadn’t yet begun.

CAB initiated the intervention of the high court regarding Ethereum, valued at €25,000 and owned by Neil Mannion. Mannion had stored the Ethereum in question in an online wallet that was discovered by CAB in the course of his prosecution in late 2014. Mannion is currently serving six and a half years in prison after he pleaded guilty to dark net drug dealing.

Mannion was arrested in the November of 2014 after a search by the Gardai on Dublin’s South Circular road property. The search was as a result of surveillance on Mannion by the Gardai following an IP address leak. The surveillance enabled the police to successfully establish the base of Mannion’s operation, after which they obtained a search warrant and raided the property. On execution of the search warrant, the cops found Mannion and his partner in crime in the apartment, where they seized mailing materials, weighing scales and drugs including LSD and amphetamine.

After the arrest, Mannion confessed to the police that he had been using the searched property as the base of his operation. He said he used to sell the drugs via Silk Road and Agora, using bitcoin. After which, he would process his orders by delivering the drugs to various parts of the world through the mail. Mannion told the police that the rate at which his operation expanded forced him to hire his partner, who specialized in the packaging and posting of the drugs.

Mannion and his partner later pleaded guilty to possession of cannabis, LSD, and amphetamine with the intent to supply. The judge presiding over the case in the Dublin Circuit Court said Mannion was the mastermind of the operation and sentenced him to six and a half years in prison, while he handed Mannion’s partner a three year sentence.

Mannion’s cooperation led to him granting CAB access to his computers, leading to the discovery of bitcoin and the Ethereum. CAB also found credit cards and an undisclosed amount of money in his bank accounts. The bitcoin, credit cards, and the funds in his bank account were all considered as proceeds of crime by CAB, while the Ethereum was left out in the legal proceedings and was not forfeited along with the others in 2016.

After Ethereum began being used in trading, CAB sought to reopen the case on Mannion’s Ethereum in 2016. CAB’s overdue interest on the Ethereum came as a surprise to Mannion, who viewed it as a breach of rights. Mannion argued that, since the case against him had been closed in December 2015, CAB had no rights to access his computers or any copies of it. Mannion acknowledged that he gave consent to the authorities to search his computer during his trial; he, however, did not agree to provide the authorities with indefinite access to the computer. Mannion concluded by stating that the manner in which his rights had been breached should not be taken lightly, and, as such, the court should rule against CAB regarding the Ethereum.

In response to Mannion’s claims, CAB stated that they had the prerequisite legal grounds in filing the case against Mannion’s Ethereum. Justice Carmel Steward, who presided over the case, sided with CAB and said that the agents involved in the case had followed the due procedure and had not breached any of Mannion’s rights as they had worked within the bounds of the law. The judge, however, accepted that Mannion’s arguments were merited. Steward advised CAB to be on the lookout for cases that could potentially lead to the breach of suspects’ rights.

According to Steward’s ruling, even though the investigations in the build up to the case had some complications regarding the constitutional and legal rights of Mannion, the Ethereum had been seized and retained by CAB lawfully.